Making Tax Digital software for sole traders

The trigger is regulatory and dated: Making Tax Digital for Income Tax became mandatory on 6 April 2026 for sole traders and landlords with qualifying income over £50,000 — about 860,000 people — with the threshold falling to £30,000 in April 2027 and £20,000 in April 2028. That is a three-year escalator of forced demand. HMRC's own messaging and The Register confirm registration is running far behind (fewer than 3 in 10), so the buyers exist but haven't chosen a tool yet. The incumbents are racing up-market and feature-up (Intuit just launched a dedicated 'QuickBooks Sole Trader' SKU for the UK's 3.1M one-person businesses), but they all assume the user wants accounting software. They don't — they want to comply and get back to work. A focused MTD-only filing app that a window cleaner or single-property landlord can finish in ten minutes a quarter wins the simplest, largest, most underserved slice before the 2027 wave hits.

MTD-compatible software today splits into two camps, both wrong for the smallest sole trader. Full accounting suites — QuickBooks Sole Trader (£10/mo), Xero Simple (£7/mo), Sage Start (£14/mo), FreeAgent (£19/mo, free with a NatWest/Mettle account) — assume the user wants bookkeeping, invoicing and double-entry concepts. Free bridging tools assume the user keeps a correctly-structured spreadsheet, which the spreadsheet-and-shoebox crowd does not. Neither serves the person whose entire need is: stay legal with HMRC, in four ten-minute quarterly sessions, without learning accounting. That person is the majority of the 860,000 first-wave taxpayers and almost all of the 2027–2028 waves. A guided, AI-categorising, £3/mo MTD-only filing app — recognised on the HMRC list, Open-Banking native, plain-English — owns that lane with cleaner positioning and far faster time-to-value than any suite.